Appeals Court Confirms Invalidation of Assessment Court Confirms Invalidation of Assessment Appeal Programs That Target Only Commercial Properties

John T. Vogel, Esq., jvogel@tuckerlaw.com, (412) 594-5622

Upper Merion Area Sch. Dist. v. King of Prussia Assocs. 2026 Pa.Commw. LEXIS 34 (Pa.Commw. March 17, 2026) — Commonwealth Court affirms lower court decision that District violated state constitutional tax uniformity principles in its selection of properties for property tax assessment appeals.

Background

In 2011, the Upper Merion Area School District (“District”) enacted Policy 605.1 for the purpose of providing guidance on the financial criteria the District would use in selecting properties for filing real property tax assessment appeals. Under the Policy’s guidelines, the District business administrator was to annually review recent real estate transactions and/or work with a third-party firm to identify properties that may be underassessed. Also the District administration was to provide to the District board’s finance committee a list of those properties identified as candidates for a District-initiated real tax assessment appeal. Only under unusual circumstances would a property within an assessment of $500,000 or less be considered for such a District-initiated appeal.

The District had filed 82 tax assessment appeals, all of which were related to commercial or industrial properties and none of which included single family residential properties, even though such properties could fall within the financial guidelines of Policy 605.1. The school district hired a third-party consultant, Keystone Realty Advisors (“Keystone”), to help select properties for tax assessment appeal. But Keystone, did not evaluate any single-family residential properties or recommend any such parcels to the District for an appeal.

Keystone did recommend several properties for appeals, five of which were parcels in a mall owned by King of Prussia Associates (“KOPA”). In 2012 the District filed tax appeals on four of these mall parcels. The appeals resulted in no changes to the assessments. The District then appealed to the Court of Common Pleas of Montgomery County. The trial court determined that the District’s selection of properties for appeals under Policy 605.1 and the District’s implementation of that policy violated the tax uniformity provision of the Pennsylvania Constitution. That language provides that “[a]l taxes shall be uniform, upon the same class of subjects, within the territorial limits of the authority levying the tax…” After the Common Pleas Court’s denial of the District’s assessment appeals, District appealed to Commonwealth Court.

Discussion

As a preliminary matter, the District denied that the selection of the KOPA properties had nothing to do with Policy 806.5. Evidence reflected that the District’s decision to file appeals against KOPA properties arose from articles in business journals concerning the pending sale of interests in those properties, such articles being published prior to the enactment of Policy 605.1 in July 2011. Also, Keystone’s consulting contract with the School District excluded mall properties. However Commonwealth Court concluded that regardless of what prompted the District to consider appeals on KOPA parcels, the appeals in question were filed after enactment of Policy 605.1.

More important, the District argued that the trial court erred in its weighing of the evidence and its findings that the District purposely and unconstitutionally excluded all residential properties from consideration. The District pointed to lower court testimony indicating that the $500,000 threshold valuation in the policy was based on a projected return of the conducting an appeal. But the District acknowledged that the District did not pursue a single tax assessment appeal against any residential property during the tenure of the business administrator who developed Policy 806.5. The record also showed that the District administration conceded that Keystone did not mention any work regarding residential properties, and the District knew the advisor’s focus was on commercial and industrial properties.

The District also contended that the trial court misunderstood the import of Pennsylvania Supreme Court’s decision in Valley Forge Towers case and misapplied the reasoning of that decision in concluding that the District Policy violated the state constitution’s uniformity clause.  Commonwealth Court rejected this, reiterating the finding in Valley Forge Towers that in taxpayer appeal cases, valuable evidence relating to other similar properties in the same subclass may be considered in determining whether the properties are over assessed. A taxing authority, however, is not permitted to implement a program of appealing only the assessments of one subclassification of properties, regardless of whether that use is commercial, single-family, or industrial. (Interestingly, the District was the defendant also in Valley Forge Towers.)

The District insisted, however, that this case was governed by the Commonwealth Court’s decision in Coatesville Area Sch. Dist. v. Chester County Bd. of Assessment Appeals, 323 A.3d 61 (Pa. Commw. 2024), which allowed a program that established monetary thresholds for appeals. The District insisted that its use here of a monetary threshold of $500,000 was proper and that the tax appeal selection policy approved by Commonwealth Court in Coatesville was similar to the present case. The District argued that the mere fact that a program did not result in a single appeal of  residential property did not mean that the policy was being implemented in an unconstitutional manner. However, the Court said that the obvious flaw was that unlike in Coatesville, there were specific factual determinations the District’s consultant focused on commercial properties for assessment appeals and that Policy 605.1 was largely designed to carry out this purpose.

In conclusion, the Commonwealth Court held the lower court did not err in finding that the District intentionally excluded single family residential properties from consideration from tax assessment appeals and that it did formulate Policy 605.1 with that intention. Accordingly, Commonwealth Court agreed with the Court of Common Pleas that the Policy violated the uniformity clause, and such appeals violated the state tax uniformity clause.    

Practical Guidance

Neutral tax appeal policies will likely pass constitutional muster with the courts. In enacting such an appeal policy or in following a program, however, taxing bodies must ensure a factual record does not exist reflecting the district’s intent to avoid appeals against residential properties. The execution of any tax appeal program policy must be done in an even-handed manner.

For questions regarding property tax assessment appeals, tax uniformity requirements, or the development and implementation of assessment appeal policies, please contact John Vogel at (412) 594-5622 or jvogel@tuckerlaw.com.